Essar Oil UK says ‘confident in its future’ amid media speculation

The government has stepped in with measures, including to address a shortage of truck drivers.Essar Oil UK said it has successfully managed through the supply disruption by taking action in early August to retain its driver base.EOUK has in fact increased vehicle shifts per day considerably, ensuring security of supply to its customers at this critical time, the company said.Essar said it is in positive negotiations with the UK tax authorities, HM Revenue and Customs HMRC, over a short extension to make some VAT payments deferred under a pandemic-related support scheme.

Indian conglomerate Essar's UK arm, Essar Oil UK, has said that it remains "confident in its future" amid speculation in the UK media about its Stanlow Refinery at Ellesmere Port in Cheshire, north-west England, being in trouble.

"EOUK [Essar Oil UK] remains confident in its future, not least as the air travel market continues to open up and demand recovers," a company statement said.

It comes as the UK is facing fuel supply shortages, resulting in queues at several petrol stations across the country. The government has stepped in with measures, including to address a shortage of truck drivers.

Essar Oil UK said it has "successfully managed" through the supply disruption by taking action in early August to retain its driver base.

"EOUK has in fact increased vehicle shifts per day considerably, ensuring security of supply to its customers at this critical time," the company said.

Essar said it is in ''positive'' negotiations with the UK tax authorities, HM Revenue and Customs (HMRC), over a short extension to make some VAT payments deferred under a pandemic-related support scheme. It also said that it has secured USD 1.1 billion in liquidity, up from USD 850 million as at 25 May 2021.

"As a result of that work over the past few months, EOUK has USD 1.1 billion in liquidity secured. Further, the company has now returned to EBITDA [earnings before interest, taxes, depreciation and amortisation] positive and is therefore in a much stronger position to weather the continued challenge presented by the pandemic," the company statement said over the weekend.

"On future VAT payments, EOUK entered into a time-to-pay (TTP) arrangement with HMRC for a total of GBP 770 million in April 2021. EOUK has already repaid HMRC GBP 547 million leaving a balance of GBP 223 million, as part of the government opt-in scheme available to all corporates in the UK," the statement said.

"All companies under the TTP have been given until January 2022 to meet their commitments. EOUK had agreed to an accelerated schedule to make this payment. However, the recovery from the pandemic has been slower than predicted. EOUK is therefore in discussions with HMRC over a short extension to make those deferred VAT payments. Those discussions are positive and EOUK looks forward to a resolution soon," it added.

The statement followed some UK media reports in recent days that the UK government was on alert in case of the collapse of the Stanlow Refinery, the UK's second largest oil refinery.

"Since the refinery was acquired by Essar, Essar has invested more than USD 1 billion in the refinery and is committed to developing initiatives that support its vision for a low-carbon future," Essar Oil UK said.

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